Economic activity weakens across US: Federal Reserve

October 16th, 2008 - 8:34 am ICT by IANS  

Washington, Oct 16 (DPA) Economic activity weakened across the US in September as consumers and businesses became more pessimistic about the economy amid the worsening financial crisis, the US Federal Reserve said Wednesday.The report known as the Beige Book, which is published eight times a year on conditions in the central bank’s 12 regions, showed consumer spending and manufacturing had decreased in most areas.

Consumer spending on high prices items was down and many places saw a shift of spending to less expensive discount stores, the report said.

Credit was “tight” with central bankers in several regions “reporting reduced credit availability for both financial and nonfinancial institutions,” the report said.

The lack of available credit has been among the chief concerns of the global financial crisis, with the government stepping in last month with a $700-billion rescue package designed to get money flowing again through financial institutions.

The Federal Reserve also said inflationary pressures moderated slightly last month.

“Most districts reported that cost pressures on prices had eased, although a number of districts noted that the costs of energy, raw materials, food, and transportation remain elevated and margins were tight,” the book said.

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